Are British businesses really being strangled by EU red tape?

October 14th, 2013

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Based on a contentious Business for Britain (BfB) report, a wide range of media reported on 14 October that there have been 3,600 new laws in three years as the EU “strangles” UK firms and that it would take 92 days to read all the regulations.

All this needs to be seen in perspective. Of course, even if it is true that it would take three months to read these regulations – which is a striking if debatable statistic – it is of limited relevance as no-one could possibly need to undertake such a task. Rules on type approval for lorries are of doubtful interest to a financial services company. Soft toy manufacturers do not need to read rules on sheep farming.

Second, the BfB report contains a series of factual errors, wrongly claiming for example that the EU is seeking to impose laws banning high heels for hairdressers, UK flags on meat packaging and olive oil on restaurant tables. These claims appear to be based on nothing more concrete than – false – reports in the Eurosceptic UK press…and in a superb example of circularity, they are today repeated in those same newspapers as if the BfB report constituted irrefutable independent research.

Third, most businesses, while no doubt wanting EU and national regulation to be as light as possible, seem to fundamentally disagree that they are being strangled by EU red tape. How else to explain surveys today by the largest manufacturing association, the EEF, and in September by the CBI demonstrating that eight or more out of ten businesses want to stay in the EU? Presumably if they really were being strangled, they would be crawling gasping for breath towards the exit…

Fourth, it is interesting to look at some examples quoted by, say, the Daily Mail as evidence of outrageous interference “handed down from Brussels” (rather than “negotiated and agreed by the UK”, as is in fact the case in the vast majority of cases).

It turns out that, unsexy as many of the rules are, they are necessary either to prevent potentially serious harm or for the single market to work or more often than not, for both of those reasons.

Yes, there do need to be rules on “anchovy fishing in the Bay of Biscay” or there would soon be no more anchovies. Rules on the labelling of spirits ensure that drinkers know what they are buying and that exporters do not have to comply with a whole series of different national rules.

It is likely that British consumers would agree that the addition of ammonium chloride- a potentially dangerous chemical if overused – as a feed additive for animals does need to be regulated. They might also want to know in clear terms how much energy water heaters use, so they can save on gas and electricity bills. Maximum residue levels for weedkillers are necessary to ensure children do not get poisoned.

There is no doubt that not all of these rules are perfect. The European Commission would be the first to agree that regulation needs to be smart and proportionate and that EU regulations do need to be regularly screened and updated and sometimes even removed. The Commission has a long record of working closely with the UK on this and always takes UK government and business input seriously.

The Commission has taken a whole series of steps recently to advance this better regulation agenda. For example, President Barroso announced earlier this month further simplification and deregulation, building on substantial progress over last few years – this was welcomed by the UK Department for Business, Innovation and Skills (BiS).

President José Manuel Barroso welcomed in turn the report on 15 October from the business leaders’ group set up by BiS, saying:

“In the last five years, the European Commission has slashed the cost of administrative burdens by 32.3 billion euros (27.4 billion GBP) and scrapped 5590 legal acts. And we are determined to go further.

Common rules are essential to make the single market work properly but I also want to make sure that the EU does not meddle where it should not and member states do not add additional burdens (“gold plating”). We have already acted on a range of specific issues where we have heard businesses’ concerns. “

So without any doubt, action on better regulation is necessary and it is happening.

But the broad picture is that rather than imposing additional red tape that would not exist without the EU, single market rules replace 28 national rules with a single EU rule, thus making life a lot easier for UK businesses operating across borders and boosting the overall economy at the same time. That is why the UK government has estimated the benefits of the single market to the UK economy as at least £31 billion and up to £92 billion a year.

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